October 10th, 2008 — , prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
While America becomes a nation of privatizing profits and socializing losses, Prosper account balances are FDIC insured.
The recent financial markets meltdowns are causing a global panic. If you are a Prosper lender, you can rest assured that your Prosper cash balances are FDIC insured.
Prosper…
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Continue reading → Prosper Account Balances are FDIC Insured
August 6th, 2008 — , borrowing from ProsperBlogger @ Peer to Peer Lending with Prosper
This is one for all of you Prosper borrowers that have not gotten a loan funded on the first try, get discouraged, quit and never come back. That’s not the case for Prosper borrower mvbrothers2 who tried to get their listing funded an incredible 57 times before finally getting the loan.
I didn’t…
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August 2nd, 2008 — , Prosper Tips, borrowing, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
If you are a Prosper lender but also have a loan, here is something interesting I learned recently: you can make a payment on your loan directly from your Prosper account.
I wasn’t aware this was possible. I have always had my payments automatically deducted from my account and never bothered to…
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Continue reading → Lenders with a Prosper Loan: You Can Pay From Your Prosper Account
August 2nd, 2008 — , prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
Prosper has been in the news recently…
At MSNBC, Prosper is mentioned in regards to formalizing terms of a loan, something I’ve blogged about before
An eBay for lending at aLive
ECommerce Times talks about an easier path to cash, calling person to person lending the “teller window” on the…
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Online StoresAugust 2nd, 2008 — , Prosper Tips, borrowing from ProsperBlogger @ Peer to Peer Lending with Prosper
Snowflaking is a way to save on interest. The general principle is to pay in a small extra amount towards a loan every month, a $5 snowflake here, a $10 snowflake there starts to build into a snowball which, if rolled downhill, compounds. These small amounts might not seem like much but they…
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Continue reading → Snowflaking your Prosper Loan to Save Interest
August 1st, 2008 — , prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
Well, I’ve finally recieved some noteriarty from the Prosper.com website, my blog has been listed!
It’s nice to be recognized for my effort in contributing useful information to the community.
If you want to check it out, go to their 3rd Party page.
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July 28th, 2008 — , borrowing, endorsements from ProsperBlogger @ Peer to Peer Lending with Prosper
Endorsements are a useful tool to help get potential lenders interested in your Prosper loan. There are a few ways to get the most out of this technique which can sometimes make the difference in whether your loan gets funded.
Endorse early
First, get your endorsements in line before you create…
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June 26th, 2008 — , lending from ProsperBlogger @ Peer to Peer Lending with Prosper
You’ve got until June 30, 2008 (4 days from today) to register with Prosper and take advantage of the bonus for signing up as a lender.
Nobody knows what will happen to the referral program as of now, but if you want to be sure and get your $25 lender bonus, here is your chance. Act now, you can…
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Continue reading → Prosper Referral Program Ending, Better Act Now!
June 26th, 2008 — , lending, prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
Its been a topic of conversation among blogs and message boards: are there any institutional lenders using Prosper? Is it even allowed?
Well, the answer is yes, they are allowed and as of now, they are being promoted. Prosper allows asset managers, hedge funds, and other institutions the…
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June 26th, 2008 — , lending, prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
Prosper.com is now providing chapter and filing date information for bankruptcies filed by prospective borrowers. If a Prosper loan listing appears where a bankruptcy has taken place, a new set of fields will appear with details of the incident.
This is a positive developement because up until…
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Continue reading → Prosper Starts to Publish Bankruptcy Details
June 14th, 2008 — , borrowing, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
If you want to read a great book that will turn a lot of ecomonic theories on their heads, read Freakonomics. It’s a great book. The author, Stephen J Dubner, is apparently a fan of Prosper and makes some interesting observations about what he sees in the marketplace.
The article is called…
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Continue reading → Prosper Written About in the New York Times
June 14th, 2008 — , Proser Statistics, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
Prosper has done a lot of work to make data transparent. Increasingly economists and credit analysts have started to study the Prosper model.
Economists Ginger Zhe Jin and Seth Freedman of the University of Maryland have just published a study looking at Prosper since inception to determine average…
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Continue reading → Interesting New Study Published About Prosper Returns
April 16th, 2008 — , borrowing, prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
The Prosper listing creation process has now been fixed at 7 days. This is intended as a means to simplify the loan generation process. Its also viewed as a way to create more fundable listings.
I’m not sure I agree with that. Some loans are more sure to fund than others, especially in the…
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April 16th, 2008 — , borrowing, prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
The Prosper listing creation process has now been fixed at 7 days. This is intended as a means to simplify the loan generation process. Its also viewed as a way to create more fundable listings.
I’m not sure I agree with that. Some loans are more sure to fund than others, especially in the…
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February 27th, 2008 — prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
When you are looking at a listing on Prosper, you used to see 2 icons at the top of the listing, one for homeownership verification and the other was for bank account verification.
The bank account verification icon has now been removed from the site.
People used to view this as a positive sign,…
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February 27th, 2008 — prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
Prosper has changed the eligibility criteria for borrowers wishing to get a second loan with Prosper.
The minimum amount of consecutive on time payments is now 6 months. Before it was only 2 months. Pre-payments don’t count.
This is a good change. It eliminates the potential for people…
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Continue reading → Criteria for 2nd Prosper Loan has Changed
February 27th, 2008 — Prosper Tips from ProsperBlogger @ Peer to Peer Lending with Prosper
A pair of recent change were made in the advanced search criteria on the Prosper.com website, one has been causing users some confusion.
The first is the ‘disappearance’ of advanced search categories. I think the intention was to streamline the search, but many think the other columns have…
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February 27th, 2008 — borrowing, lending, prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
Some good news from Prosper Days 2008 for both borrowers and lenders: Prosper is planning to modify their policy on when payments are pulled from borrowers bank accounts to better match their pay days.
Up until now, the date that a payment is due has always been dependent on the initiation date of…
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Continue reading → Payment dates are going to change to improve loan performance
February 27th, 2008 — lending, prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
One of the takeaways from “Prosper Days 2008″ is that Prosper is going to start filing law suits for collections of defaulted loans.
Prosper is planning to starting the process slowly, as of today, a total of 5 suits have been filed in California with more on the way once the process is smoothed…
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February 19th, 2008 — Prosper Tips, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
While it might not make a difference to someone in dire straits or in a bankruptcy, it could help keeping the community aspect alive within Prosper: it’s within the rules to send a late borrower a note with a reminder.
I’m treading on thin ice because lenders on Prosper have had their accounts suspended by taking this too far so if you do contact a borrower be careful. To be safe, never contact a borrower after the loan is in default. The legal limit here is that you are not allowed to make any attempt to collect a debt on Prosper’s behalf.
The terms of service state:
You should not contact delinquent borrowers directly. Prosper has a detailed delinquency schedule for borrowers, and any additional contact you have with a borrower may expose you to civil or criminal penalties for unlicensed debt collection. The language and tone you use when collecting a debt matter are important in the eyes of the law so what you might consider reasonable may in fact be illegal. If you were to accidently[sic] break the law you’d be putting yourself, your fellow lenders, and Prosper at risk of litigation.
What this means is you are allowed to contact your borrowers if they are just late. I have done this on two occasions now, and both loans have become current. One borrower replied almost instantly with a ‘don’t worry, payment in transit’ note which was nice to read. Not only did it remind the borrower that we are people but also allayed my fears of fraud.
Here is a suggestion for a note you can send, modify it to suit your needs, but consider doing it. The more people that contact late borrowers, the more likely they are to remain current. While it might not make a big difference, small differences are significant.
Hello,
I wanted to congratulate you on your recently funded loan. I was one of the winning bidders and am glad to be of assistance in fulfilling your request. Your loans metrics and reasons met my personal criteria for risk; it would appear it did for others as well.
I am writing to urge you to keep in mind that I and the others are all individuals, not banks or institutional lenders, and we are counting on your repayment. I’ve decided to take a leap of faith; Prosper has a significant number of defaults and delinquencies, especially later in the loan cycle. This is very damaging to the lenders portfolio and has caused many to pull their money out of Prosper in search of better returns.
Prosper is an excellent resource, I personally believe very strongly in the idea of community lending and want this concept to succeed. It takes both sides to make this work so please take note of your loans late status and rectify it.
It’s good to know you can turn to your peers again in the future and I know from experience it’s much, much easier to get funded once you have had success with Prosper. Wishing you luck and a successful transaction.
Continue reading → It’s a good idea to send late borrowers a note
February 6th, 2008 — Prosper Tips, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
With Prosper loans, I’ve often suspected that there is a direct correlation between default rates and length of employment but had never checked my suspicion against Prosper’s performance data.
It appears that yes, there is certainly a correlation. At all employment levels the rate of default drops. Default rates for people employed 10+ years is less than half of the rate of people employed for less than 6 months. Generally, people employed more than 1 year have a substantially lower default rate, but the best performance are those steadily employed for the longer period of time.
Personally, I had expected a higher disparity between the length of employment ranges but there is enough evidence to support the conclusion that people employed more than 10 years are the safest risk.
For any borrowers employed more than 10 years, you should make a point of this fact in your listing.
Continue reading → Length of Employment Has Big Impact on Default Rates
February 5th, 2008 — Prosper Tips, borrowing from ProsperBlogger @ Peer to Peer Lending with Prosper
One of the fastest turnoffs for me when judging the merits of a loan request on Prosper is a meager description of why the borrower needs the money. I have seen descriptions as tiny as “Got some bills to clear up” or “Consolidating cards”. This, frankly, won’t do.
It’s been proven that the longer the description (within reason) the better the chances of getting funded are. As lenders, we want to know what the money is for and why you feel you are qualified for the loan. While many lenders on Prosper don’t care and just look at the numbers, most don’t.
There are a few reasons a short description is a turn off. First, it appears the borrower has something to hide. Second, it appears the borrower doesn’t really care about this listing implying they don’t care about paying it back. Next, lenders want to know if you have writing skills, this may sound ridiculous but its true: when something is very badly written it demonstrates a lack of care which implies no repayment. Furthermore, lenders just want a basic idea of who someone is, the way a borrower describes their needs tells lenders a lot.
As far as better descriptions go, there is certainly room for improvement. My biggest pet peeve is the “magical thinking” listing that seems to imply an alignment of the stars or some other metaphysical event that will cause Prosper lenders to flock to a listing. This attitude implies the loan will be repaid magically as well. A good description does 4 simple things:
You’d be amazed how many loans don’t even achieve one of them. There is a second good reason to do this: once you lay this information out, it should be obvious to you as well whether you can really afford this loan. If your numbers don’t clearly demonstrate enough income to fund the loan consider asking for less or changing your budget so you can actually afford it.
Continue reading → Borrowers Need Longer and Better Descriptions for Better Chance of Funding
January 28th, 2008 — prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
Prosper has started using a new collection agency called AmSher. Many people who follow Prosper view this as a challenge to the weak performace that Penncro has had in collections of late and defaulted loans. I think this is great news and will certainly be a step towards improving the performance of collecting loans that go late.
AmSher is privately held company and is licensed in all fifty states. They have been around since 1939 in a few variations until 1986 when they started in collections.
Many of you might have seen the email announcement from Prosper. While AmSher charges a slightly higher fee for collections, my advice is to change your settings and give them a chance, at the very least to signal to FirstSource and Penncro that there is alot of dissatisfaction with their performance.
You can change this setting in the Account tab > Lending tab > on the bottom right.
Continue reading → Prosper Adds New Collection Agency: AmSher
January 24th, 2008 — Prosper Tips, prosper tools from ProsperBlogger @ Peer to Peer Lending with Prosper
In the last year Prosper.com has introduced a series of developers to help build upon the platform. These tools allows users to acquire data about Propser loans in one of two ways: via an API (application programming interface) and a data export service.
The API is a web service based interface (SOAP) that allows for querying of the Prosper marketplace. This service enables retrieving data of things such as bidding, listing information and portfolio information.
The data mining service provides complete information on all listings, bids, users and specific loans that have ever been created on Prosper. This data is available in two formats, either as a Microsoft Excel Spreadsheet and in raw XML. Prosper also has tools to import the XML data into different databases such as SQLServer, MySQL or Access.This data is useful for things such as building graphs, finding changes in the marketplace over time, and examining bidding patterns.
If you’d like to explore the Prosper developer tools, you can find the developers API here and the data export tools here.
In addition, to support developers, Prosper has a developers discussion forum and also an outlay of many different tools that have already been developed.
Online StoresContinue reading → Prosper’s Developers Tools and Data Mining Service
January 21st, 2008 — lending, microfinance from ProsperBlogger @ Peer to Peer Lending with Prosper
More and more financial professionals are advising clients to not only diversify their investments, but also to diversify their streams of income. What is an income stream? An income stream is simply a means from which you generate income, multiple income streams are more than one way to make money.
Generally, the more the better and the more diversified the safer. Your full time job is an income stream and probably the biggest one you have. Many folks have a full time and a part time job. That means you have 2 income streams. You may have money invested in bonds from which you earn a return; this is also an income stream. What about considering person to person lending using Prosper as another income stream?
First, let’s look at other types of income streams. Dividends on stocks are an example, as well as rental income from property, advertising on your website, Ebay selling, day trading stocks, royalties, interest from a savings account and side jobs like teaching a class are all also examples. Some are passive, some are more active.
The one thing all of these different streams have in common is that they earn income in different ways. This is exactly why it’s valuable to look at your finances in this way.
Lending in an online marketplace like Prosper is growing fast and can provide you another way to earn a return on your investment dollars that are diversified from the stock market and other interest returning investments. Prosper is like Ebay for lending. You can bid as little as $50 on a loan listing if you think it meets your personal criteria for risk and return. Prosper has thousands of loans to choose from.
While there are many other good vehicles out there to earn a return on your investment dollar, peer to peer lending using Prosper is something to consider as a way to diversify and shift the market for lending away from banks and to the public. Banks have become very wealthy earning interest: time to democratize this and let folks like us earn a share!
Online StoresJanuary 17th, 2008 — Credit Grades, borrowing from ProsperBlogger @ Peer to Peer Lending with Prosper
Credit card consolidation loans are among the most common types of lending taking place today. Often times I read about people that have multiple cards at 20% - 30% interest rates. Even for cards at lower rates, depending on your credit, getting a consolidation loan is a great idea, and Prosper can help.
If you have a significant amount of credit card debt things can begin to spiral out of control with bills piling up. The money going to finance charges on credit cards eats up income needed for other important things and as you pay small amounts every month, it can look like you will never get out of credit card debt. This is why a credit card consolidation loan thru Prosper can help.
Prosper is an online marketplace like Ebay, except for loans. You post a loan request and people bid on your loan until its funded. If your loan gets funded early, the interest rate can go down as lenders start to bid lower and lower on your rate.
For a variety of reasons, its hard to pay off your balances every month. While credit cards can be convenient and credit card providers are very willing to give you cards, the interest rates they charge are often much higher than average.
If you have excellent credit, you can get a Prosper loan from as little as 7% or 8%. If you are paying 20% interest now, you can save a lot of money and pay the balance off much faster.
For example, if you owe $10,000 and are paying 20%, you are paying $2,000 a year in interest. Just to service this debt, you must pay almost $170 a month in interest! You have to pay more just to lower the balance.
But let’s say you got a Prosper loan at 9% to consolidate the debt, that would mean you would only need to pay $75 in interest, a savings of almost $100 a month in interest. This can have a huge impact on how quickly you get out of debt.
Prosper loans are amortized over 3 years. You can make payments any time you want, and you can pay the loan off early without any extra fees. Prosper is also a very safe place to borrow money.
Online StoresContinue reading → Lower Your Interest Rate: Credit Card Consolidation with Prosper
January 16th, 2008 — Prosper Tips, lending, prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
I was transferring some money into my Prosper account today and I noticed a new feature: Prosper now supports instant transfers, so you no longer have to wait the standard 4 days before the money appears in your account and is and is available for bidding on loans.
This is great news. Now, under certain conditions, you can transfer funds and get right to your bidding!
From the Prosper help files, describing the new feature:
When a transfer to Prosper meets certain requirements, funds are made available in a lender’s Prosper account instantly, with no delay. Requirements for instant transfer:
- Transfer amount must be between $500 and $10,000
- Sum of pending transfers must be less than 20% of lender’s active loan value
For example, if you had an active loan value of $10,000, you could transfer between $500 and $2,000 to your Prosper account instantly. If you attempted to transfer $3,000 to Prosper, it would not qualify for instant transfer because the amount is more than 20% of your active loan value. Your $3,000 transfer would still continue, but would be subject to the standard 4-day waiting period.
January 14th, 2008 — Prosper Tips, borrowing, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
One question that I seem to get over and over via email thru my blog is if Proser is safe for lenders and borrowers to use. In a nutshell, yes, it is very safe.
Prosper has many safeguards for both lenders and borrowers to ensure that things like personal information is not divulged and fraud cannot take place as a result of the website. Prosper also has a community of over 500,000 members to support eachother. In the two links below, you will see a long bullet pointed list of things which show why Prosper is a safe place to borrow and lend money.
Read the links below and judge Prosper’s features and safeguards for yourself. Peer to peer lending is growing fast and Prosper represents the leading online marketplace for this service.
If you are interested in becoming a lender, Prosper makes the process of joining and funding loans very safe and easy, you can read in detail about Prosper’s features here:
One question I seem to get over and over via email is if Proser is safe for lenders and borrowers. Safe is a relative term and would have to consider their own personal level of risk and security. But as far as the service Prosper.com is concerned, yes it is safe.
Let me take a moment to mention some of Prosper’s features and safeguards, from this list you can make your own judgements.
If you are interested in borrowing money using Prosper, your identity is safe and you have complete control over your listing and eventually your loan. You can read further here:
Is Prosper safe for Borrowers?
If you would like to explore person to person lending, you can join Prosper here.
Online StoresJanuary 14th, 2008 — lending from ProsperBlogger @ Peer to Peer Lending with Prosper
Prosper is a safe marketplace to lend money to other people in return for interest. Loans are originated by Prosper and payments are distributed by Prosper. Here are some of the points which make Prosper a safe place to lend money to other people:
Now, what we can’t speak for is whether you will earn much profit. It’s like the stock market: make bad trades, lose money. Make bad loans, you get the same. Each lender has different levels of comfort and risk. Want low risk, lend to AA borrowers, or want to beat the market? Lend to lower credit grades.
Making money with Prosper is up to you, whether your money is safe and Prosper is safe, yes, it is. Here you can find out how to get $25 free to start with Prosper.
Online Stores Related WebsitesJanuary 14th, 2008 — borrowing from ProsperBlogger @ Peer to Peer Lending with Prosper
Prosper is a safe marketplace to borrow money from people just like yourself. Loans are originated by Prosper and your payments are pulled directly from your bank account by Prosper. Here are some of the points which make Prosper a safe place to borrow money from other people:
Now, there is no guarantee your loan will fund, you need to provide as much information as you can and make sure the interest rate you are offering is competitive. You can learn more about getting a Prosper loan here and you can join Prosper here.
Online Stores Related WebsitesJanuary 14th, 2008 — Prosper Tips from ProsperBlogger
The Eric’s Credit Community website has created a neat little snippet of code which you can use in a blog, bulletin board or forum to summarize your lending activity on Prosper.
The signature comes in 2 different flavors, banner sized 560 x 65) and a mini banner (220 x 50).
To get the new signature, just go to this website link and enter your Prosper screen name:
http://www.ericscc.com/index.php?page=signatures
The signature will be generated, from here you can copy the code and use it wherever you’d like.
Here is mine, in mini banner format:
It will always stay updated with your latest statistics. Pretty nifty.
Continue reading → How to Get a Customized Signature for your Prosper Account
January 11th, 2008 — Proser Statistics, Prosper Tips, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
When judging a loan within Prosper.com, I’d always assumed that homeownership was always a good thing when it came to the potential for default. Well, interestingly, it turns out that the only credit grade in which default rates increase is HR (High Risk).
Continue reading → When Judging a Loan, Homeownership Only Seems to Matter for HR Grade Loans
January 9th, 2008 — Prosper Tips, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
I’ve often ignored the “Credit Profile” category for “Inquiries in the Last 6 Months” when bidding loans on Prosper and realize now that it’s to my detriment. This category has a huge impact on delinquency rates and overall ROI (Return on Investment).
The reason I ignored this field is because I have seen mine at different times in my credit history and thought “where did that number come from”, implying that this number was never right. Well, sometimes it may not be correct, but it definitely has a big impact on performance.
Let’s crunch the numbers. I have focused on 4 categories, 0 to 3 inquiries, 3 to 6 inquiries, 6 to 10 inquiries and 10+ inquiries. As the inquiries go up, the return on the investment goes down.
This chart tracks the differences in percentages of defaults at the different credit grades at different levels of inquiry. The trend is obvious at every credit grade.
Most of these default rates are double between the 0-3 level and 10+ level. Ask any lender to double their default rate and see what they tell you. There is often the sense that too many inquiries equals desperation and the numbers certainly bear this out.
Continue reading → High number of “Inquiries in the Last 6 Months” Makes a Huge Difference
January 9th, 2008 — Proser Statistics from ProsperBlogger @ Peer to Peer Lending with Prosper
On the Prosper.com forums there is a debate as to whether some states or regions tend to be more delinquent than others. Borrowing some statistics from LendingStats.com, it turns out there are some small differences in rates of delinquency by region.
When I divided lending statistics by region, the southern United States had a slightly higher default rate than other regions, the east had the lowest rate of default:
As far as individual states go with more than 50 loans, Maine, Nebraska, Wisconsin, Ohio, Virginia, Connecticut, and Indiana had the best (Maine having the best) repayment rates and these states tend to be from the Midwest and East. All of these were below 7%.
Some states (with more than 50 loans) which had especially problematic delinquent rates are New Mexico, New Hampshire, Texas, Alabama, Idaho, Georgia, California, and Missouri (in that order). New Mexico, New Hampshire, Texas and Alabama’s delinquent rates were all above 20%, a truly terrible rate of delinquency.
You can view the entire list at LendingStats.com here.
Online StoresContinue reading → Are Delinquencies More Likely for a Specific Region or State in the US?
January 8th, 2008 — Prosper Tips from ProsperBlogger @ Peer to Peer Lending with Prosper
Return on investment is a percentage determination of how much profit you earn from any given investment. For Prosper.com users, you can also project your year end ROI using the formula below and the Prosper.com website, to do this take the following steps:
((Daily Interest Accrual x 365) / Total Account Value) x 100
Below you can see were to get these figures in red.
Multiply your daily interest accrual by 365 days in the year, then divide it by the the total account value and then multiply that result by 100. This will give you projection of your ROI for the year. If we plugged some real numbers into this formula, we would see:
(3.00 x 365 / 5000)*100 = 21.9, or a 21.9% ROI.
So if you are earning $3 in daily interest and have $5,000 invested in Prosper, your return will be 21.9%
To determine your own ROI, log in to your Prosper account, navigate to “Your Account”, then “Lending”, then plug the following 2 numbers into the formula above:
To find “Daily Interest Accrual”, use this value:
To find “Total Account Value” use this value:
This gives you a current projection of ROI, not your current or actual, meaning what you have actually earned as of the moment you perform this calculation projected for the rest of the year. It’s also possible to calculate your current ROI by using this calculation.
Online StoresContinue reading → How to Project Return on Investment (ROI) for Prosper Loans
January 8th, 2008 — Prosper Tips from ProsperBlogger @ Peer to Peer Lending with Prosper
Return on investment is a percentage determination of how much profit you earn from any given investment. For Prosper.com users, its relatively easy to determine ROI by using a simple formula and the Prosper.com website.
First of all, here is the formula:
(Net Gain/Total Account Value) x 100
Below you can see were to get these figures in red.
Divide your net gain by the total account value and then multiply that by 100. This will give you a snapshot of your ROI. If we plugged some real numbers into this formula, we would see:
(1000/5000)*100 = 20, or a 20% ROI.
To determine your own ROI, log in to your Prosper account, navigate to “Your Account”, then “Lending”, then plug the following 2 numbers into the formula above:
To find “Net Gain”, use this value:
To find “Total Account Value” use this value:
This gives you a current ROI, meaning what you have actually earned as of the moment you perform this calculation. It’s also possible to project your end year ROI by using this calculation.
Continue reading → How to Calculate Current Return on Investment (ROI) for Prosper Loans
January 8th, 2008 — prosper news from ProsperBlogger @ Peer to Peer Lending with Prosper
On the forums, Doug Fuller is the Vice President of Operations at Prosper recently announced an improvement in the collections program. An “Early Delinquency” letter series was tested during the early delinquency period (1 -30 days past due).
Half of the early delinquency population was sent a letter and half was not, the result was that 57% more recipients of the letter initiated a manual payment (41% vs 26%). Prosper has introduced a formal two letter series along with a process to automatically generate and send the letters.
The first letter will go out 15 days past due and mention the “community aspect” meaning that the money came from a group of individuals. The second letter is more traditional and discusses consequences.
This is a very positive development since the community aspect should serve as a strong incentive to pay the loan off.
January 7th, 2008 — Prosper Tips, lending from ProsperBlogger @ Peer to Peer Lending with Prosper
Reading the Prosper.com forums, one of the complaints I see regularly is about lenders ROI percentage (return on investment). Well, generally, with a good loan, Prosper’s ROI is quite good. What is going wrong then? Well, one area to look at is the loan auction.
Too often, loans that are getting fully funded are getting bid down to very low interest rates compared to the credit history involved. I have become more and more dismayed at the loan auction format and turn more and more to automatically funded loans because of the guaranteed interest rates.
What is happening here and going wrong? Well, lenders should give up on a loan when the rate gets too low. What I do personally is bid and then allow the listing to be outbid if the rate gets too low. Well, more often than not, the rate does get bid down and that means my lending funds are sitting still too long whilst a good loan is found. Generally I don’t use rate laddering, mainly because I rarely invest too much into a single loan. Rate laddering works effectively with more than 2 bids.
So what is the solution? Fund more loans by not bidding the fully funded loans to death. There are wa
